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How we respond to failures and bounce back from our mistakes can make or break our careers.

Take the example of two MBA graduates who were laid off from their positions during the recession. Both were distraught. Being fired provoked feelings of sadness, indecisiveness and anxiety about the future.

For one, the mood was transient. Within two weeks he was telling himself, “It’s not my fault; it’s the economy. I’m good at what I do, and there’s a market for my skills.” He updated his resume and, after several failed attempts, finally landed a position.

The other spiraled further into hopelessness. “I got fired because I can’t perform well under pressure,” he lamented. “I’m not cut out for finance; the economy will take years to recover.” Even after the market improved, he was reluctant to apply for positions and feared rejection.

How these individuals handled failure illustrates opposite ends of the spectrum.

Optimism and Resilience

Research clearly demonstrates that people who are naturally resilient have an optimistic explanatory style – that is, they explain adversity in optimistic terms to avoid falling into helplessness.

Those who refuse to give up routinely interpret setbacks as temporary, local and changeable:

“The problem will resolve quickly…”

“It’s just this one situation…”

“I can do something about it…”

In contrast, individuals who have a pessimistic explanatory style habitually think setbacks are permanent, universal and immutable:

“Things are never going to be any different…”

“This always happens to me…”

“I can’t change things, no matter what…”

University of Pennsylvania psychology professor Martin P. Seligman believes most people can be immunized against the negative thinking habits that may tempt them to give up after failure. In fact, 30 years of research suggests that we can learn to be optimistic and resilient – often by changing our explanatory style.

Learning from Mistakes

Many managers have learned to reframe personal and departmental setbacks by stating: “There are no mistakes, only learning opportunities” – and it’s a great sentiment. In practice, however, their companies often continue to view failures in the most negative light.

Part of the problem lies in our natural tendency to blame. We perceive and react to failure inappropriately, expending energy to either assign or avoid blame.

In the 1930s, psychologist Saul Rosenzweig proposed three broad personality categories for how we experience anger and frustration:

Extrapunitive responses are common in the business world. Fortunately, managers at all organizational levels can repair their flawed responses to failure. Business consultants Ben Dattner and Robert Hogan suggest three highly effective steps in “Can You Handle Failure?” (Harvard Business Review, April 2011):

Cultivate Self-Awareness.
First, identify which of the three blaming styles you use. Do you look to blame others? Deny blame? Blame yourself?
Next, work with a coach or mentor to improve your level of self-awareness.

Cultivate Political Awareness.
Whereas self-awareness helps you understand the messages you’re sending, political awareness helps you understand the messages others are receiving. It requires you to know how your organization defines, explains and assigns responsibility for failure, as well as how the system allows for remedial attempts.

Develop New Strategies.
Once you’ve become more aware of your failure response style (and your bad habits), you can move toward more open and adaptive behaviors:Listen and communicate. Most of us forget to gather enough feedback and information before reacting, especially when it comes to bad news.Reflect on both the situation and the people. We’re good at making assumptions. Remember that each situation is unique and has context.Think before you act. You don’t have to respond immediately or impulsively. You can always make things worse by overreacting in a highly charged situation.Search for a lesson. Look for nuance and context. Create and test hypotheses about why the failure occurred to prevent it from happening again.

Blameworthy or Praiseworthy?

Harvard management professor Amy Edmondson delineates a “spectrum of reasons for failure” in “Strategies for Learning from Failure” (Harvard Business Review, April 2011), as summarized here:

Deviance: An individual chooses to violate a prescribed process or practice.